Perfect Labor Storm 2.0 is a blog that highlights workforce trends, demographic shifts, and human resources changes that will change the way employers do business.

July 25, 2010

Only 20 Percent of Workers Qualify for High Demand Jobs

Despite prolonged high unemployment, employers are struggling to find qualified skilled workers? How is this possible?

“Everyone has been caught flatfooted,” according to author/human capital expert Edward Gordon.During a recent interview on my radio show Workforce Trends, Gordon said, “we only have 20% to 25% of the current workforce that fits into jobs that are in high demand right now….where we are creating jobs, not where we are abandoning and consolidating jobs.”

Gordon has been warning about this talent meltdown since 1991, when he authored the

first of 17 books."Across the United States refineries are breaking down with unusual frequency. Though BP and other refiners are making major safety changes, the breakdowns frequently stem from technician errors due to increasing shortages of trained workers,” wrote Gordon in the introduction if his newest book "Winning the Global Talent Showdown." He wrote that statement nearly a year before the Deep Horizon well accident in the Gulf of Mexico this year.

The Wall Street Journal reported a story in mid-July that Congress was investigating if the accident was related to a lack of properly trained technicians on the rig. Then just a few days later, the Journal reported that a critical alarm system had been disabled which would have warned workers of dangers. The story line unraveling at the scene of the accident seems to confirm Gordon’s forecast - a shortage in the quantity and quality of personnel and decision making ability is imminent. Gordon warns that if we don’t do something quickly about re-training and educating people differently, “the world will not end in a big bang but in a slow grinding halt.”

It’s not that mankind hasn’t seen shortages like these in the past.When we entered the Industrial Age beginning somewhere around 1850, we needed people to design, manufacture, and repair things.That need created a lot of blue collar, semi- skilled, and low- skilled jobs that paid enough money to workers so that that they could live a middle class lifestyle. While 84% of those workers graduated from high school by the 1950s, many of them were only reading at the 6th or 8th grade level. But that didn’t matter - there were still jobs for them. They could make a good living and raise a family in comfortable surroundings.

But then technology began to change everything.In the 1970s, the Industrial Era became history and the Computer Age began to change the nature of work. Jobs now required different skills at a higher education level.We still needed people to design, manufacture, and repair things but the complexity of the work required better skills. We started shutting down and shedding many of those low- skill and semi- skill jobs. They started going elsewhere - to Japan and South Korea. At the time they were the skilled low-wage countries. Now, it is India and China who are low-wage and Japan and South Korea are high- wage countries.But that too is changing according to Gordon who says, “wage inflation is beginning to change the nature of work in India and China, too.”

Unfortunately the U.S. work mindset remained the same while the world changed. Many leaders in business and government believed that only a certain proportion of our people needed to be really well- educated and the rest could get along pretty well with a mediocre education or no education at all. As a result, we now have more than 90 million US workers who lack the reading, writing, and math skills to do the jobs properly. Our education system is just so far behind resulting in 95 million adults are reading at or below the 8th grade reading level. That is just a staggering number. It is almost the third of our population.

Now we find ourselves exiting the Computer Era and entering the Cyber-Mental Age, where advanced technologies are embedded in everything.“We need the people who have the necessary higher levels of literacy in math and reading, and special technical training in virtually every business sector you can think of from A to Z,” says Gordon. “Things are changing so fast in every industry that unless something is done, a lot of current workers, incumbent workers, will find themselves with skills that are out of date.

Today's long-term jobs crisis is not about the current financial meltdown. It is about an accelerating talent showdown. The basic cause is that unprecedented technological advances are ever more rapidly transforming the world of work. This will continue to raise the U.S. talent ante for people seeking employment or for businesses that need to fill high-skill jobs. The U.S. Department of Labor finds that 62 percent of all U.S. jobs now require two-year or four-year degrees and higher, or special postsecondary occupation certificates or apprenticeships. By 2020 we can expect that these talent requirements will increase to include 75 percent of U.S. jobs.

The World Future Society predicts that over the next decade the amount of new technology introduced into the U.S. economy will equal that of the last 50 years! While it took 120 years for the nature of work to change from the beginning to the end of the Industrial Era, it only took 40 years for the Computer Age to change work. We are already witnessing a major talent shift from low-skill jobs to more complex knowledge jobs across major world economies as we enter what Gordon calls the "Cyber-Mental Age" of ultra-high technology.

And that’s why today we are living in a world of high unemployment and skilled worker shortages, or as Gordon calls it: a world of “abundance and poverty.”